Annex A
Memorandum to the Committee from the Royal
Ordnance Trade Unions
MINISTRY OF DEFENCE COMMENTS
1. GENERAL
"If Bishopton closes, a common indigenous
supplier of propellants will no longer be available to the UK
Armed Forces." This is already the case. Although the
component nitrocellulose is made in Bishopton, the actual propellant
for small arms and medium-calibre ammunition is manufactured in
the Netherlands by RO's subsidiary Muiden Chemie.
2. GUN PROPELLANTS
"Somchem remains an option, but one
that would only become viable if there was no risk that political
instability might put that risk at option." The MoD's
view on contractual arrangements with South African companies
has not changed since the last HCDC report in 1999.
3. ROCKET PROPELLANTS
"No clear alternative source of supply
has been identified for the propellants used in aircraft ejection
seats." The ejection seat manufacturer (Martin Baker)
identified a suitable alternative UK supplier (Nobel Ardeer) some
years ago. Qualification trials are now underway with this manufacturer
and are proceeding satisfactorily.
4. SMALL ARMS
PROPELLANTS
"The company is now contemplating in
future procuring all its small arms nitrocelluloses from the Czech
Republic." Provided the final product is properly qualified
and meets UK MoD requirements, the MoD would have no objections
to RO sourcing the nitrocelluloses fro the Czech Republic. Not
only have the Czechs a long tradition of manufacturing world-class
small arms ammunition, they also obtain the raw cotton used in
the nitrocellulose manufacture from the same German company currently
used by RO Bishopton.
5. SAFETY, PERFORMANCE
AND RELIABILITY
". . . serious difficulties have been
experienced with the safety and performance of the alternative
propellants." This is incorrect. RO have confirmed that
the initial trials of propellant samples provided by WNC-Nitrochemie
indicated the need for changes to be made, but they considered
this is in no way unusual for qualifying a new source of manufacture.
RO have assured us that the development programmes in question
remain on course for successful completion and that the problem
referred to by Mr Dromey has already been resolved. We understand
that there is a remaining issue concerning a minor amount of soot
deposit left in the barrel after firing, but the cause has been
identified, and work is in hand to eliminate the problem. RO are
also aware that all relevant trials data will have to be provided
to the Ordnance Safety Group in order for the propellants to be
approved for use by the UK Armed Services.
6. SUPPLIER AVAILABILITY
AND STRATEGIC
ASSESSMENT
". . . the only source of propellant
being considered as the possible sole alternative to Bishopton
is the German company, Nitrochemie." RO have conducted
a vigorous market survey in order to identify potential propellant
suppliers. Evidence from this survey presented to the HCDC indicated
some five potential options. As a result of the company's stringent
selection process, and in line with RO's current strategy to procure
from a single source, it is understood that a suitable supplier
has now been identified.
7. COSTS
(a) ". . . the prices being quoted
by Nitrochemie exceed those of Bishopton." The MoD cannot
comment in detail on the price agreed by RO with one of its suppliers.
However, RO have confirmed that the prices quoted by their preferred
supplier are very much lower than the costs at which the propellants
can be made at Bishopton at the volume envisaged.
(b) ". . . It would appear that
an increase in price of some 12.5% has been agreed between the
company and the MoD to offset the re-qualification costs associated
with the Blackcap and Redstart motor propellants for the Sea Wolf
and Sea Skua missile systems."
(1) Blackcap. Re-qualification costs are
estimated to be some £5 million for the Blackcap Rocket Motor
propellant. However, there would have been re-qualification costs
whether Bishopton closed or not, since RO had already made the
decision to discontinue the factory's capability to manufacture
double base extruded rocket motor propellant and nitro-glycerine.
The increase in cost for the new motor for Sea Wolf Block 2 is
less than 10%. This reflects the work and risk involved in redesigning
the motor. These costs are not connected with re-qualification
and would be incurred regardless of where manufacture took place.
(2) Redstart. The MoD has agreed no additional
costs to re-qualify the Redstart Rocket Motor propellant anywhere
other than RO Bishopton. The MoD's total Redstart requirement
is expected to be met by RO Bishopton before closure, and there
are no plans to procure additional Redstart rocket motors beyond
this.
(c) ". . . it would appear that
the MoD is effectively prepared to invest £7.9 million in
either Franc or Germany to ensure that the contract for Sea Wolf
can be fulfilled." The MoD is unsure where the figure
of £7.9 million has been arrived at. Nevertheless, there
is no question that the MoD has given any undertaking to invest
£7.9 million or any other amount in either French or German
companies to satisfy the Sea Wolf Block 2 contract requirements.
Payment for the Sea Wolf Block 2 would have to be made, wherever
the items were manufactured.
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